HRA 11/18/1993 - 6338HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
THURSDAY, NOVEMBER 18, 1993
7:30 P.M.
WILLIAM BURNS
EXECUTIVE DIRECTOR OF HRA
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, NOVEMBER 18, 1993, 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: October 14, 1993
ACTION ITEMS:
PRESENTATION BY DR. DENNIS RENS AND
REBECCA KEENAN, FRIDLEY SCHOOL DISTRICT #14 . . . . . . 1.1
CONSIDER RESOLUTION TO AUTHORIZE EXECUTION
OF DEVELOPMENT CONTRACT, ECO FINISHING. . . . . . . . . 2.1 -2.3
DISCUSS SCATTERED SITE ACQUISITION. . . . . . . . . . . 3.1 -3.3
CONSIDER APPLICATION FOR MHFA
COMMUNITY REHABILITATION FUND PROGRAM . . . . . . . . . 4.1 -4.4
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . 5.1 -5.3
INFORMATION ITEMS:
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . 6.1 -6.2
FRIDLEY TOWN SQUARE UPDATE . . . . . . . . . . . . . . . 7.1 -7.4
WESTMINSTERUPDATE. . . . . . . . . . . . . . . . . . . 8.1
MEETING DATES FOR DECEMBER THROUGH MAY 1994 . . . . . . 9.1
HEDMAN ACQUISITION UPDATE . . . . . . . . . . . . . . .10.1 -10.6
DISCUSS REQUEST BY PARSON'S ELECTRIC. . . . . . . . . .11.1 -11.4
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 14, 1993
CALL TO ORDER:
Chairperson Commers called the October 14, 1993, Housing &
Redevelopment Authority minutes to order at 7:30 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, John Meyer,
Duane Prairie
Members Absent: Jim McFarland
Others Present: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
Craig Ellestad, Accountant
Jim Casserly, Consultant
Dr. Spencer Johnson, Columbia Park Properties
Matthew Karl, Frauenshuh Management Co.
Douglas Mayo, Westminster Corporation
Deborah Gustafson, Bridgewater Financial Group
APPROVAL OF SEPTEMBER 9, 1993, HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve the
September 9, 1993, Housing & Redevelopment Authority minutes with
the following correction on page 2, paragraph 5, middle of page:
change "Moon Plaza" to "Rice Plaza ".
UPON A VOICE VOTE, ALL VOTING' AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED AND THE MINUTES APPROVED AS AMENDED.
1. TABLED: CONSIDER RESOLUTION AUTHORIZING A MODIFICATION TO THE
REDEVELOPMENT PLAN, ECO FINISHING, INC.:
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to remove this
item from the table.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
Ms. Dacy stated that at the last meeting, the HRA tabled this item
until the City Council conducted a public hearing on the amendment
to the redevelopment plan and determined whether or not the Council
wanted to create a tax increment district for ECO Finishing. The
Council ultimately decided they did not want to establish a tax
HOUSING & REDEVELOPMENT AUTHORITY MTG. , OCT. 14, 1993 - PAGE 2
increment district; however, they did add the parcel into the
redevelopment project area.
Ms. Dacy stated it would be in order for the HRA to pass a similar
resolution if the HRA approves of the modification of the
redevelopment plan. Secondly, staff is asking the HRA to consider
providing ECO Finishing with a $125, 000 loan.
Ms. Dacy stated that on page 1.6 of the agenda was Mr. Casserly's
proposed amortization schedule on the loan that would be spread
over six years. At a 5% interest rate, the first two years with
principal and interest would be deferred. The HRA would gain
approximately $22,354 in interest, and the loan would be repaid at
the end of six years.
Ms. Dacy stated that regarding the creation of a tax increment
district, the Council was very concerned about the new state law
which would subtract local government aid and HACA from the
community if a tax increment district is created. However, by
adding the parcel into the redevelopment project area, assistance
is still provided to ECO Finishing, and the HRA does recoup its
funds plus interest on the loan.
Ms. Dacy stated that Deborah Gustafson of Bridgewater Financial
Group is at the meeting on behalf of ECO Finishing, Inc. Ms.
Gustafson put together the SBA financing for the project.
Ms. Gustafson stated ECO Finishing is planning to construct a
29, 000 sq. ft. building in Fridley. In addition to the building,
there will be $1.5 million in new equipment costs. ECO Finishing
is making a substantial investment into this project, and this
project will create 30 new jobs for Fridley.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve
Resolution No. HRA 9 - 1993, "A Resolution Modifying the Redevelop-
ment Plan for Redevelopment Project No. 1 to Reflect Increased
Project Costs and Increased Geographic Area within Redevelopment
Project No. 1 and Modifying the Tax Increment Financing Plans for
Tax Increment Financing Districts No. 1 through No. 12 to Reflect
Increased Project Costs and Increased Geographic Area within
Redevelopment Project No. 1".
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Mr. Commers thanked Ms. Gustafson for coming to the meeting. He
stated the HRA hopes this is a very successful project for ECO
Finishing.
Mr. Casserly stated the development contract has been prepared and
will be brought back to the HRA for approval at the November
meeting.
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 3
2. CONSIDER AGREEMENT. FRIDLEY PLAZA OFFICE BUILDING PARKING:
Mr. Commers stated that at the last meeting, the HRA members had
some questions regarding the leasehold agreement. Staff has
addressed those questions in a memo from Barbara Dacy dated October
7, 1993. Staff is recommending the HRA pass a motion approving the
"Amended and Restated Leasehold Agreement" for the Fridley Plaza
Office Building parking lot.
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the
"Amended and Restated Leasehold Agreement" for the Fridley Plaza
Office Building parking lot.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
3. CONSIDER REQUEST FOR TIF ASSISTANCE. WESTMINSTER CORPORATION:
Ms. Dacy stated that four years ago, a similar, but different,
request by Westminster was evaluated by the City. At that time,
Westminster was proposing a market rate project. For a variety of
reasons, Westminster did not pursue that project. Now, Westminster
has submitted an application to the Department of Housing & Urban
Development and has received approval for a "capital grant" to
construct a 51 -unit, low income, elderly apartment project just
north of St. William's Church on 5th Street.
Ms. Dacy stated that in February and March 1993, Westminster
received the required land use approvals from the Planning
Commission and City Council for the project. Westminster is now
requesting $82,000 in tax increment assistance for the project.
The purpose for the assistance is for land writedown and site
preparation. Staff has suggested to the HRA and to the petitioner
that the assistance be provided through "pay -as- you -go ". The
parcel is already in Tax Increment District No. 1, so there is no
need to create a new district. The $82,000 is well within the
recommended guidelines for a "pay -as- you -go" project. It is about
3% of the project cost which is around $2.5 million. The
assistance would be paid back in about 3 1/2 years.
Ms. Dacy stated staff is recommending that the HRA authorize staff
to continue to the development contract stage with Westminster
Corporation to prepare a development agreement for HRA approval at
a future meeting.
Mr. Doug Mayo, Westminster Corporation, stated that since last
spring, the project has gone through some minor revisions and
design changes. The project is for a three story, 51 -unit building
designed to house senior citizens. Fifty of the units will be one
bedroom units for seniors on rental assistance. One unit without
rental assistance will be a two bedroom unit for the caretaker.
HOUSING &__REDEVELOPMENT AUTHORITY MTG., OCT. 14. 1993 - PAGE 4
Mr. Mayo stated this was a senior citizen project submitted to HUD
several years ago. Westminster obtained a reservation of funds,
and they have been working through the development process since
then. They are now working on submitting an application for HUD's
firm commitment. They hope to have some firm numbers in a couple
of weeks and submit their application to HUD by mid- November so
they will probably get their commitment from HUD in January 1994,
with construction starting in mid to early April.
Mr. Mayo stated the building will have a community room for use by
the tenants. There will be lounges on the second floor and third
floor. Westminster runs a strong resident service program for its
tenants, and there will be a resident service advisor assigned to
the project to assist the tenants in running programs.
Mr. Commers asked if there is any loss to the City.
Mr. Casserly stated, no, this project will have a substantial
contribution to the development program.
Mr. Meyer asked if there will be any type of resident prescreening
program. He stated the City is embarking on a number of ways to
start upgrading their housing stock. Many other communities are
finding that a prescreening process for prospective tenants helps
prevent huge amounts of damage and deterioration to rental units.
Mr. Mayo stated that in his experience with their elderly housing
projects, they do not have any problem with seniors. Seniors treat
the property very well. Typically, senior citizen projects are
very low maintenance because there is literally no damage to the
units.
Ms. Schnabel asked if tenants will come from the Fridley area, or
will they come from all over the metropolitan area?
Mr. Mayo stated that there is the potential for tenants to come
from all over the metropolitan area: When the elderly leave their
homes or environment, they do not like to move very far away, so
he would expect that most of the tenants will come from Fridley or
communities immediately surrounding Fridley. However, this is a
federally assisted project so it has to be open to anyone who is
income eligible in the metropolitan area.
Mr. Commers asked the square footage of the units.
Mr. Mayo stated each unit is 540 square feet.
Mr. Commers asked what the typical market rate rental would be?
Mr. Mayo stated that $265 per unit per month is needed to cover
operating expenses for each unit on an annual basis. The market
HOUSING A REDEVELOPMENT AUTHORITY MTG.. OCT. 14. 1993 - PAGE 5
rate rent would be around $500 -600 per unit per month, but that is
not a factor, because the tenants will only pay 30% of their
adjusted gross income. Typically, residents pay about $150 per
month, some higher, some lower. In some cases, rental assistance
is loot.
Mr. Commers stated he is very familiar with this project. In the
early 19701s, he chaired a committee at St. William's to try to do
this same kind of project, but they were unable to do so. He is
very glad to see this project, and he fully supports it. He
believed this project is responsive to some of the issues that have
been raised as far as housing for the elderly in the City of
Fridley. It is very difficult for churches to do these kinds of
projects on their own, and they need a corporation like Westminster
to construct and manage these projects.
Mr. Meyer stated that in looking at the elevation, it looks like
an ugly building.
Mr. Mayo stated there are several things HUD will not pay for.
One of the reasons they are asking for TIF funds is for some design
changes that Westminster would like and the City would like that
will enhance the appearance of the building and make it more
attractive.
Ms. Dacy stated that when Westminster went through the process in
February /March 1993, the Planning Commission and City Council
studied the elevations of the building at great length. Attached
to the approval of the special use permit was a stipulation that
the exterior of the building would be constructed of brick. At
that time, Westminster indicated that brick was expensive and that
HUD may or may not approve a brick exterior. However, the City
wanted to send the message. to HUD, via the special use permit, that
the City preferred brick as the predominant material in the
downtown Fridley area. If HUD did not approve the brick exterior,
then the Planning Commission and City Council reviewed another plan
for a combination of rock face block along the bottom with aluminum
siding and brick accents. The design changes referred to by Mr.
Mayo, the roof and chimney accents, will help to improve the
design.
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve in
concept the request for tax increment assistance in the amount of
$82,000 by Westminster Corporation and to authorize staff to
prepare a development contract for final HRA approval.
UPON A VOICE VOTE, COMMERS ABSTAINING, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED.
4. REVIEW SCATTERED SITE ACQUISITION POLICY AND AUTHORIZE
ACQUISITION NEGOTIATIONS FOR 560 HUGO STREET N E
HOUSING & REDEVELOPMENT AUTHORITY MTG.. OCT. 14, 1993 - PAGE 6
Mr. Fernelius stated that at the October HRA meeting, staff
proposed a recommendation to divide the pool of funds for the
Scattered Site Acquisition Program in'half. Fifty percent of those
funds would be allocated to the general acquisition of blighted
properties, and the other 50% would be allocated to properties
which staff has identified, through the Housing Rehab Program, as
properties that could not be repaired because they are in such a
deteriorated condition. Since that time, staff has identified
several properties they would recommend to acquire for each pool
of funds.
Pool A: Housing Rehab Program
Mr. Fernelius stated there are two properties which were
identified, through the prescreening process and inspections, as
substandard and in such poor condition that rehab is not feasible,
at least financially. Staff prioritized one of those properties
over the other.
Mr. Fernelius stated ohe of those properties is 100 Charles Street
on the corner of East River Road and Charles Street. It is a 105
foot wide by 200 feet deep lot which consists of one single story,
single family structure of about 572 square feet and a deteriorated
garage. There are a number of apartment buildings located in the
general vicinity of this particular site. The house is occupied.
The inspector indicated there are a number of deficiencies with
this property, including a bad electrical system, plumbing system,
deteriorated windows and doors, and deteriorated flooring.
Mr. Fernelius stated the other property which staff identified as
a higher priority to acquire is 560 Hugo Street N.E. This property
has a history of problems. which include exterior maintenance of the
building, noxious weeds, and outside storage of junk and other
debris. An addition which was originally constructed in 1976 is
still unfinished. There are other electrical and plumbing
violations that exist, as well as an inadequate heating system.
Mr. Fernelius stated that in 1992, the owner of 560 Hugo Street
applied to Anoka County for housing rehab assistance and was
denied. ACCAP was the agency administering the program at that
time, and their inspector made a similar assessment of the
property. At that time, the City's building inspector inspected
the property and said it was in pretty bad shape.
Mr. Fernelius stated the property at 560 Hugo Street has an
estimated market value of $38,896. The property consists of two
25 ft. by 110 ft. lots for a total of 5,550 square feet. Under
the current City code, this ,is an unbuildable lot without a
variance. In light of these facts, staff feels the only option
would be to begin negotiations with the owner for voluntary
acquisition.
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 7
Mr. Fernelius stated there is a property immediately to the east
which appears to be abandoned. There is the possibility of
acquiring that property with funds under the same program in the
future and combine the properties for a buildable lot.
Ms. Schnabel stated acquiring 560 Hugo Street would certainly be
a start in improving the neighborhood, with the hope that they can
also acquire the adjacent property.
Mr. Commers stated maybe they should do the- abandoned site
acquisition on the property next to 560 Hugo Street instead of
acquiring the property at 513 Fairmont Street N.E. which is being
recommended for acquisition under the General Acquisition Program.
They need to have some strategy with these programs.
Mr. Fernelius stated that is a possibility, but 513 Fairmont is a
high priority also.
Ms. Dacy stated they will find out if the property is abandoned and
the selling price.
Pool B: General Acquisition Program
Mr. Fernelius stated this pool of money will be used to acquire
abandoned, substandard, and /or vacant properties which are
considered blighting influences. He stated staff started with a
list of all residential properties (131) with an estimated market
value of $50,000 or less. Staff then separated out those
properties (13) which had previously been classified in a
windshield survey in February 1993 as one or two level priorities
(13 properties). They focused on level one priorities (5
properties). Two of those properties (100 Charles Street and 560
Hugo) left three properties to consider.
Mr. Fernelius stated staff used a Scattered Site Acquisition
worksheet which evaluated properties on a number of criteria which
included whether or not the property was located in a target
neighborhood (Riverview Heights or Hyde Park), the size of the lot,
cost involved, and in an at risk location. After that assessment,
staff prioritized the remaining three properties as follow: 513
Fairmont (the highest priority for-acquisition), 8280 East River
Road, and 1632 Rice Creek Road.
Mr. Fernelius stated 513 Fairmont Street is another property that
is unbuildable under current code without a variance. The size of
the lot is 50 ft. by 110 ft. The house has been vacant since July
1992 and staff has received numerous complaints from surrounding
neighbors. The Public Works Department had to secure the building
because kids had broken the windows and were getting into the
house.
HOUSING & REDEVELOPMENT AUTHORITY MTG.. OCT. 14, 1993 - PAGE 8
Mr. Fernelius stated that regarding 8280 East River Road and 1632
Rice Creek Road, staff is recommending that the City initiate
negotiations with these property owners to see if' they are
interested in selling their homes on a voluntary basis in order to
avoid relocation costs. If they are interested, then staff would
get appraisals on the properties and come back to the HRA at a
future meeting for approval to make formal offers.
Ms. Schnabel stated that the first thing staff should do before
contacting the property owners is to find out if there are any
outstanding debts or liens against these properties.
Mr. Commers stated that if 513 Fairmont is abandoned and in
foreclosure, the City should be careful and should probably get a
legal opinion on how to best go about acquiring the property.
Ms. Dacy stated there are a couple of neighbors who might be
interested in purchasing the property at 513 Fairmont.
Ms. Schnabel asked if these neighbors would be interested in
purchasing this property on their own without City involvement when
they know it is available.
Ms. Dacy stated that is possible.
Mr. Commers stated he believed it is the consensus of the HRA
members to approve the concept of acquiring these properties,
subject to staff obtaining more information on the financial
aspects of these properties before making any offers.
Ms. Dacy asked if the HRA would like staff to investigate the
status of the property next to 560 Hugo Street N.E.
Mr. Commers stated, yes, staff should do that.
5. LAKE POINTE MARKETING STATUS:
Ms. Dacy stated the proposal submitted by Busch & Partners, Inc.,
was the lowest cost proposal of the three proposals reviewed by
Mayorf,Nee, Mr. Burns, Mr. Commers, Mr. Casserly, and herself.
Staff believes that Busch & Partners is the best qualified
advertising firm to assist the City in advertising and marketing
of Lake Pointe. Busch & Partners is proposing a combination of
a number of advertising and marketing tools. They divided the
proposal into phases. In the first phase, they will identify the
prospects, work on the Lake Pointe image, and write a series of
marketing materials. They are also looking at some on -site
signage. In the second phase, they will continue the advertising
effort. They are suggesting an editorial in the Minnesota Real
Estate Journal and more bi- monthly direct mail campaigns, more
participation in real estate exhibits, and a number of activities
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 9
to present this site and market this site in the development
community.
Ms. Dacy stated the small subcommittee who reviewed the proposal
is recommending that the HRA authorize staff to execute a contract
with Busch & Partners, Inc., for $37,500. This is well within the
budget guidelines developed by the HRA in the 1993 budget. Thirty
thousand dollars were allocated for advertising, and $30,000 were
allocated for a marketing consultant.
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to authorize staff
to execute a contract with Busch & Partners, Inc., for advertising
and marketing the Lake Pointe site at a cost not to exceed $37,500.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
6. CLAIMS AND EXPENSES:
Mr. Ellestad added the following checks to the check register:
#2046 - ICMA (retirement)
#2047 - David J. Anderson (aerial photo of Lake Pointe)
#2048 - Barna, Guzy & Steffen (Sept. legal services)
#2049 - Briggs & Morgan (legal work)
#2050 - Casserly (Sept. legal expense)
#2051 - Isaacson Lawn Care (Lake Pointe maintenance)
#2052 - Minnegasco (Rice Creek Plaza utilities)
#2053 - Richfield Bank and Trust (Greenmasters)
Ms. Dacy stated that staff has been working with Fay Wegner for the
last year and a half. She has provided excellent consulting advise
on how to establish the housing programs, specifically the Housing
Mortgage Assistance Program.
Ms. Dacy stated the HRA members have never formally discussed a fee
for Ms. Wegner's consulting services. She wanted the HRA members
to be aware that Ms. Wegner will be soon be submitting an invoice
in the amount of $7,000. She stated the HRA budget does include
an allocation of $28,000 for Professional Services, so there are
funds available to pay for these services. She stated Mr. Burns
has reviewed and approved Ms. Wegner's request.
Mr. Commers stated that the HRA should have been made aware of this
sooner. They are being asked to approve an expenditure that is
after the fact, and that is not right.
Ms. Dacy stated she did not disagree with Mr. Commers. However,
on several occasions, staff asked Ms. Wegner to provide the HRA
with an hourly rate, a contract, or a quote, and she did not do
that. Ms. Dacy stated this is an unusual situation, and it is not
the way staff usually operates.
r
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 10
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve the
check register, checks #2419 -2453.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
7. RICE PLAZA UPDATE:
Mr. Commers stated this is an information item only. Apparently,
the two remaining tenants, STS Temporary and Hong Kong Kitchen,
have found new locations. STS Temporary will be out by November
1 and Hong Kong Kitchen will be out by the middle of December.
8. UPDATE ON SALES TAX IMPACT:
Mr. Commers stated that at the last meeting, he had questioned
whether or not the City had to pay sales tax for the full contract
amount for Isaacson Lawn Care (Lake Pointe maintenance) or only for
the unpaid balance of the contract. In a memo dated October 5,
1993, Mr. Ellestad states that the sales tax is due on the entire
amount of the contract.
9. DISCUSS OPTION PROPERTIES AT LAKE POINTE:
Mr. Commers stated that regarding Lake Pointe, the HRA members had
received a copy of a memo dated October 4, 1993, from Jim Casserly
stating that he has been informed by Tom Threlkeld of Bayport
Properties, who is representing BBMI in its search for a location
for a new medical facility, that even though the Fridley Lake
Pointe site was attractive, BBMI has decided to select the City of
Plymouth where BBMI is currently located.
Mr. Casserly stated that as a result of these discussions, he is
putting together an analysis which shows what kind of density is
needed at Lake Pointe to recover the HRA's investment in the
project.
Mr. Commers stated that regarding the option properties at Lake
Pointe, at the last meeting, the HRA had asked staff to contact Ms.
Sadie Gunderson and Mr. David Hedman to see if they were willing
to extend the options on their properties for one more year. Any
development of the Lake Pointe property will require the HRA to
acquire the Hedman property.
Mr. Commers stated that according to Ms. Dacy's memo dated October
7, 1993, Mr. Hedman is very anxious to sell his property and move.
He is not interested in extending the option for one more year.
Ms. Gunderson is willing to extend the option for one more year.
Mr. Commers stated that if the HRA is going to spend a lot of money
marketing the Lake Pointe site to attract a development within the
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 11
next two years, it might make sense to acquire the Hedman now in
a voluntary type of setting. On the other hand, he did not like
to see them take -that property and hold it when they do not have
a development proposal. But, it is also not a very good situation
if Mr. Hedman sells the property and then the HRA has to take the
property from the new owners in two years.
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to authorize staff
to begin negotiations for the purchase of the Hedman property and
to authorize staff to obtain a one year option on the Gunderson
property at a cost of $500.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Ms. Dacy stated that if the HRA acquires the Hedman property, staff
could approach ACCAP to see if they are interested in purchasing
the house and moving it off the property.
10. OTHER BUSINESS:
a. Letter from Bob Welle, Reliance Real Estate Services,
Inc.
Ms. Dacy stated she has received a letter dated October
8, 1993, from Bob Welle of Reliance Real Estate Services.
Mr. Welle would like the HRA to receive this letter into
the record. No action is needed at this time. Mr. Welle
would like the HRA to discuss the following issues at
future HRA meetings:
1. The HRA discuss acquisition of the Suh property
when the HRA discusses its 1994 budget.
2. The HRA make a motion to establish a policy of
a willingness to sell the Dairy Queen and
service station properties separately from the
Rice Plaza property.
3. The HRA grade with aggregate or paving
materials over the Rice Plaza property after
demolition to allow a more convenient access
to the Suh property.
Mr. Commers asked staff to get more specific information
from Mr. Welle regarding a possible development on the
corner which includes the Dairy Queen and service station
properties.
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to
receive the letter dated October 8, 1993, from Bob Welle,
Reliance Real Estate Services, Inc.
•1
HOUSING & REDEVELOPMENT AUTHORITY MTG., OCT. 14, 1993 - PAGE 12
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
b. HRA Meeting Dates
Ms. Dacy stated that Mr. Burns has a conflict with the
HRA meetings on the second Thursday of each month. He
would like the HRA to consider moving the meeting dates
to the first Thursday of each month for calendar year
1994. The HRA can think about this and make a decision
at their November meeting.
Ms. Dacy reminded the HRA members that the next meeting
is on November 18, rather than November 11, as November
11 is Veterans' Day and the Municipal Center will be
closed.
ADJOURNMENT:
Chairperson Commers declared the October 14, 1993, Housing &
Redevelopment Authority meeting adjourned at 9:50 p.m.
Respectfully sub itted,
L Saba
Rec ding Secretary
I —
J
Community Development Department
HouswG AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 10, 1993
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Presentation by School District #14 Representatives
Dr. Dennis Rens and Rebecca Keenan of School District #14 will be
present at the HRA meeting to update the HRA on current school
district activities. No action is needed by the HRA on this item.
BD:ls
M -93 -658
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2.1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 10, 1993
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Resolution to Authorize Execution and
Delivery of Development Contract for ECO
Finishing, Inc.
At its October 1993 meeting, the HRA authorized staff to prepare
a development contract to provide a $125,000 loan to ECO Finishing.
ECO Finishing is constructing a 29,000 square foot plating facility
at the northwest corner of 51st Way and Industrial Boulevard.
Consistent with other development contracts, the enclosed develop-
ment contract requires issuance of a certificate of completion
prior to the HRA issuing the loan. The loan is proposed to be
repaid over a six year period at a 5% interest rate.
Victor Rosenblum is defined as the "redeveloper" in the development
contract; therefore, he, alone, is responsible for repayment of the
$125,000 loan.
Recommendation
Staff recommends the HRA* approve the enclosed resolution
authorizing execution and delivery of the development contract
between the HRA and Victor Rosenblum.
BD:ls
M -93 -665
2.2
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A CONTRACT
FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY FRIDLEY AND VICTOR
ROSENBLUM.
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a
Contract For Private Redevelopment (the "Contract ") with VICTOR
ROSENBLUM (the "Redeveloper ").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved and
adopted a development program known as the Modified Redevelopment
Plan for its Redevelopment Project No. 1 (the "Redevelopment
Program ")pursuant to Minnesota Statutes, Section 469.001 et sea.
2.02. The Authority hereby finds that the Contract
promotes the objectives as outlined in its Redevelopment Program.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the Executive Director of the
Authority are hereby authorized to execute and deliver the Contract
when the following condition is met:
Substantial conformance of a Contract to the Contract
presented to the Authority as of this date.
Adopted by the Board of Commissioners of the Authority this
day of , 1993.
Chairman
ATTEST:
Executive Director
CITY OF FRIDLEY, MINNESOTA
PROPOSED LOAN PAYMENT SCHEDULE: ROSENBLUM PROJECT
PRINCIPAL
INTEREST
DEFERRD INTEREST
AMORTIZATION
125,000
5.00%
2 YEARS
6 YEARS
W
--------------------------------------------------------------------------------
ACCRUED
PRINCIPAL
INTEREST
TOTAL
DATE
PRINCIPAL
INTEREST
PAYMENT
PAYMENT
PAYMENT
BALANCE
--------------------------------------------------------------------------------
8
/01
/
1994
125,000
0
0
0
0
125,000
2
/01
/
1995
125,000
3,125
0
0
0
128,125
8
/01
/
1995
128,125
3,125
0
0
0
131,250
2
/01
/
1996
131,250
3,125
0
0
0
134,375
8
/01
/
1996
134,375
3,125
0
0
0
137,500
2
/01
/
1997
137,500
9,967
3,438
13,404
127,533
8
/01
/
1997
127,533
10,216
3,188
13,404
117,317
2
/01
/
1998
117,317
10,472
2,933
13,404
106,845
8
/01
/
1998
106,845
10,733
2,671
13,404
96,112
2
/01
/
1999
96,112
11,002
2,403
13,404
85,110
8
/01
/
1999
85,110
11,277
2,128
13,404
73,834
2
/01
/
2000
73,834
11,559
1,846
13,404
62,275
8
/01
/
2000
62,275
11,848
1,557
13,404
50,427
2
/01
/
2001
50,427
12,144
1,261
13,404
38,284
8
/01
/
2001
38,284
12,447
957
13,404
25,836
2
/01
/
2002
25,836
12,759
646
13,404
13,078
8
/01
/
2002
13,078
13,078
327
13,404
0
- - - --
12,500
- - - - - --
137,500
- - - - --
23,354
- - - - - --
160,854
ROSE2 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 23- Sep -93
I`
a° 0
1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 10, 1993
TO: William Burns, Executive Director of HRA
FROM Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Scattered Site Acquisition Program
At the October 14, 1993, HRA meeting, staff presented the following
recommendations:
1. Divide the program budget in half; $50,000 for general
acquisition of blighted properties, and $50,000 for
severely deteriorated properties which could not be
repaired under our housing rehab program, and
2. Begin negotiations on potential acquisition of two
properties, specifically 560 Hugo Street and 513 Fairmont
Street.
The HRA had no objection to the first recommendation; however, they
did have some concerns with the properties staff identified. At
the meeting, we indicated that both properties were considered non-
buildable-under the zoning code due to lot size. If acquired, a
new home could not be constructed without a variance. As a
practical matter, this would probably be unlikely, in addition to
the fact that it would be difficult to attract a builder because
of the small lots. Nonetheless, we recommended acquisition since
one property is the subject of many neighborhood nuisance
complaints (513 Fairmont Street) and the other is costly to
rehabilitate (560 Hugo Street). In both cases, rehabilitation is
not feasible, leaving the owners with few options.
The HRA .did have questions about the re -use of these sites and
whether there were any mortgages or liens that should be taken into
consideration. There were also questions about the procedures for
negotiating a purchase. We are continuing to research these issues
and will be prepared to discuss our findings at the November 18,
1993, HRA meeting.
However, we would like to take some time to step back and confirm
the goals of the program. After the October meeting, we were not
sure if the HRA was questioning the financial feasibility of the
3.2
Scattered Site Acquisition Program
November 10, 1993
Page 2
program or the goals. The intent of the program, as originally
discussed, is to remove severely deteriorated abandoned ore
uninhabitable homes We need to confirm whether the HRA wants to
place a higher priority on buildability and financial return or
other factors. Essentially, potential sites for acquisition fall
into two categories: buildable and non - buildable.
Generally, we have found the buildable sites to be more costly in
terms of up -front acquisition, but there is the potential for
greater financial return due to higher land sale income. On the
other hand, non - buildable sites tend to be cheaper, but will
probably be more difficult to sell. It is these properties,
however, which seem to have the greatest number of deteriorated
structures. Since rehabbing the homes in most cases either is not
feasible or allowable (under zoning code) , owners have few options.
Buyers in the private market would not be able to rehab the house
or build a new home. Unless acquired, these properties will
continue to be a problem in the neighborhoods, creating a potential
to adversely affect values of adjacent properties. In the case of
the properties on Fairmont and Hugo, the lots could be split in
half and added to adjacent properties, thereby making adjacent
properties conforming (see attached map).
Recommendation:
The scattered site program will not "break even" despite the
acquisition of buildable properties. Greater financial return will
likely occur with the acquisition of buildable sites, but it is
unlikely that the "private market" can resolve problems arising
from non - buildable sites. Staff recommends the HRA pursue
acquisition of blighted properties despite the buildable status of
the properties in order to remove deteriorated houses in
neighborhoods. Staff will also prepare a strategy for reuse of
properties prior to HRA authorization for acquisition.
GF /BD:ls
M -93 -656
3.3
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4.1
'no" � Community Development Department D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
L�ITE: November 10, 1993
TO: William Burns, Dmcutive Director of HM
FR M: Barbara Dacy, Community Development Director
Grant Fernel.ius, Housing Coordinator
80BMD=: Consider Application for MM Community
Rehabilitation Find Program
The Minnesota Housing Finance Agency (MRF'A) has announced the availability of
$2,000,000 in funds for a new statewide program designed to help cities with
neighborhood improvement preservation.
The funds, 'Which will be issued in the form of a grant, can be used for such
activities as acquisition, demolition, rehabilitation, and even gap financing.
The grants will be awarded on a competitive basis and will be divided into two
pools. Attached is a copy of the RFP outlining the programming features.
It should be noted that the City Council must designate specific neighborhoods
to receive funding. Staff has scheduled discussion on this topic for the
November 22, 1993, Council conference meeting.
Based on our current efforts to address rental housing, we feel the funds could
be best be used for rental rehabilitation. We would propose to use these
additional funds as a means of expanding our existing rental rehabilitation loan
program. These new funds could be used to make direct loans to property owners
who cannot apply for our existing program due to ownership restrictions
( corporations /ccupanies are not eligible under IH'A guidelines) . With a few
modifications, we would have the same procedures and requirements as our existing
program. Because the application is due on December 6, 1993, we need to begin
work on the application immediately.
Recompendation
Staff recommends the HRA authorize the Housing Coordinator to prepare and submit
an application for the M MA Community Rehabilitation Fund Program in the amount
of $350,000. It is understood that the City Council will designate the
neighborhoods to receive funding.
Cam': is
M- 93-655
4.2
MINNESOTA HOUSING FINANCE AGENCY
COMMUNITY REHABILITATION FUND
REQUEST FOR PROPOSALS
The Minnesota Housing Finance Agency (MHFA) announces the availability of
$2,000,000 in grants to Cities for. the improvement and preservation of housing in
neighborhoods or geographic areas designated by applying Cities (designated
areas).
FORM OF AWARDS
Funds will be awarded to Cities in the form of a grant for designated areas. The full
amount of the Grant will be advanced to the City after selection of approved proposals.
ELIGIBLE USES OF GRANT FUNDS
Community Rehabilitation Fund grants may be used to make loans or grants to eligible
recipients (eligible mortgagors) for one or more of the following activities relative to
single or multi - family housing:
1. acquisition;
2. demolition. In such cases the cleared land must be used for the construction of
housing, or for other housing related purposes primarily for the benefit of persons
residing in the adjacent housing;
3. rehabilitation;
4. permanent financing;
5: refinancing; and,
6. financing the difference between the cost of the improvement of blighted property,
including acquisition, demolition, rehabilitation, and construction, and the market
value of the housing upon its sale (gapAnancing).
Grant funds may not be used for administrative costs.
4.3
SIZE OF GRANTS
The minimum State Grant is $30,000. The maximum State Grant is $350,000.
One third (1/3) of available funds will be allocated to Designated Areas with requests
for State Grants in amounts from $30,000 to $100,000 (small grant pool). Two - thirds
(2/3) of available funds will be allocated to Designated Areas with requests for State
Grants in amounts greater than $100,000, but no greater than $350,000 (large grant
pool)..
In the event Proposals selected for funding by MHFA are inadequate to exhaust the
funds allocated for either small or large grant pools, the unused portion will be
reallocated to the other pool.
Except as provided in the Community Rehabilitation Fund Procedural Manual, a copy
of which is included in the application packet, proposals will be approved for no more
than two neighborhoods per city.
PARTICIPATION TERM
Grant funds are to be expended by Cities in the form of loans or grants to eligible
mortgagors not later than June 30, 1995.
DESIGNATED AREA
For the purpose of focusing resources, an applying City must designate a
neighborhood or other geographic area within which the grant may be used. Such
designation shall be by a resolution of the City's governing board.
ELIGIBLE MORTGAGORS
Cities may make loans and grants to a wide variety of individuals and organizations,
involved with housing, a complete description of which is contained in the Community
Rehabilitation Fund Procedural Manual.
Grants or loans made by the City in the Community Rehabilitation Fund program must
be used for housing rented to "or owned by persons or families with incomes less than
or equal to 115 percent of the greater of state or area median income, as determined
by the United States Department of Housing and Urban Development.
APPLICATION PROCESS
Only one proposal per* neighborhood is permitted, but more than one
proposal per city may be submitted.
Proposals will be accepted from statutory, or home rule cities, city or county housing
and redevelopment authorities, city pbrt authorities or economic development
authorities. Nonprofit organizations may submit proposals if the city within which it is
located enacts a resolution authorizing the organization to apply on the city's behalf.
4.4
Interested parties may request application packets from the following MHFA staff
person:
Minnesota Housing Finance Agency
400 Sibley Street, Suite 300
St. Paul, MN 55101
Attention: Reed Erickson (612) 296 -8843
or toll free 1- 800 - 657 -3960, extension 6 -8843
Application packets will contain a copy of this Request for Proposals, a Community
Rehabilitation Fund Procedural Manual, and a Proposal Format describing the
information to be included in the proposal.
PROPOSALS ARE DUE BY 4:30 P.M. ON DECEMBER 6, 1993. The MHFA
will review the applications and final selections should be made by the MHFA board
no later than December 16, 1993. Applicants will be notified of whether they have
been selected by January 7, 1994.
If you have any questions concerning the Community Rehabilitation Fund or the
application process, please contact the MHFA staff person named above.
This Request for Proposal (RFP) is subject to all applicable federal,
state, and municipal laws, rules, and regulations. MHFA reserves -the
right to modify or withdraw this RFP at any time . and is not able to
reimburse any applicant for costs Incurred In the preparation of submittal
of applications.
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TO: FRIDLEY KR.A
FROM: CITY OF FRIDLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
OCTOBER 1993
ADMINISTRATIVE BILLING:
ADMINISTRATIVE PERSONAL SERVICES
ADMINISTRATIVE OVERHEAD
TOTAL ADMINISTRATIVE BILLING:
OPERATING EXPENSES:
AMERICAN EXPRESS — LUNCH
CORRECTION — COPIER ALLOCATION.
TOTAL OPERATING EXPENSES:
TOTAL EXPENDITURES — OCTOBER 1993
Re: U 2WATA\HRAXTIF\93BILLwki
Account #'s for
HRA's Use
5.2
Account #'s for
City's Use
13,842.00 101 -0000- 341 -1200
250.00 101 - 0000 -336 -3000
460 -0000- 430 -4330 14.092.00
460- 0000 - 430 -4337 191.37 236 - 0000 -336 -3000
460 -0000- 430 -4335 0.02 236 -0000 -131 -0000
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a° 0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
DATE: November 10, 1993
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Rice Plaza Update
The remaining tenant, Hong Kong Kitchen, has signed a lease with
Holly Center. A building permit is currently being processed for
remodeling of one of the tenant spaces in Holly Center. The
building should be vacant by the end of December 1993. In the
meantime, Jim Kordiak has been negotiating for the sale of the
furnace and air conditioning equipment in the building. Hopefully,
this will generate some income to defray our expenses.
On the January 1994 agenda, we will schedule an item for the HRA
to authorize receipt of the demolition bids. The Fire Department
has requested use of the building in January to perform fire
training exercises. On the February 1994 agenda, we will schedule
an item to receive and award the demolition bid to a contractor.
In the meantime, we are preparing the specifications for the bid
package, and we are also contacting the MPCA to tour the building
for proper disposal of hazardous materials. We are estimating that
the bids may range from $35,000- 40,000 to demolish the building.
BD:ls
M -93 -661
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7,1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
DATE: November 10, 1993
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Fridley Town Square Update
Lowell Wagner advised me on November 10, 1993, that he has
submitted a revised site plan to Walgreen's to address two issues.
Walgreen's is reluctant to pursue the Fridley Town Square project
because of lack of a second access to the property and visibility.
Walgreen's apparently is not pleased that the building is located
on the eastern portion of the property instead of the western
portion adjacent to University Avenue. Further, Walgreen's has
requested Lowell to pursue the installation of another driveway on
Mississippi Street, at least an exit.
In the meantime, Don Fitch is pursuing acquisition of the former
Amoco property at the northeast corner of Osborne Road and
University Avenue. Should the Fridley Town Square redevelopment
project not.proceed, the settlement agreement approved by the HRA
in September 1993 would be moot. Fitch would then have the ability
to appeal the Commissioners' award on the Dairy Queen property on
Mississippi Street.
Lowell will be contacting me next wee
Also attached for the HRA's information
our attorney regarding postponement
Fitch's appeal. Another update will
meeting.
BD:ls
M -93 -663
k with Walgreen's decision.
is the correspondence from
of the hearing dates for
be provided at the December
ROBERT A. GUZY
BERNARD E. STEFFEN
RICHARD A. MERRILL
DARRELL A. JENSEN
JEFFREY S. JOHNSON
RUSSELL H. CROWDER
JON P. ERICKSON
LAWRENCE R. JOHNSON
DAVID A. COSSI
THOMAS E MALONE
MICHAEL E HURLEY
VIRGIL C. HERRICK
HERMAN L. TALLE
October 29, 1993
"DOS
JEA3
Barna, Guzy & Steffen, Ltd.
ATTORNEYS AT LAW
400 Northtown Financial Plaza
200 Coon Rapids Boulevard
Minneapolis, MN 55433
(612) 780 -8500 FAX (612) 780 -1777
Writer's Direct Line: (612) 783 -5136
Barb Dacy
Fridley Municipal Center
6431 University Ave NE
Fridley, MN 55432
Re: Fridley Housing & Redevelopment v. Fitch
Our File No. 42001 -002
Dear Barb:
7.2 PAMELA M. HARRIS v
CHARLES A SEYKORA
WILLIAM M. HANSEN
DANIEL D. GANT-Elk, JR.
BEVERLY K. DODGE
GREGG V. HERRICK
JAMES D. HOEFT
JOAN M. QUADE
SCOTT M. LEPAK
STEVEN L. MACKEY
DAVID M. WEIGEL
ELIZABETH A. SCHADING
ROBERT C. HYNES
1935 -1993
This is just to bring you up to date on our activity in the above
matter. As a result of the tentative settlement that was reached
at the time your deposition and that of Bill Burns was scheduled,
the motion for summary judgment that we had already filed, and
the then existing scheduling order which was at that time about
to expire, had to be.extended. Through a motion submitted by
mail based upon a stipulation of counsel, the scheduling order
was amended extending the date by which discovery was to be
completed to October 1st, and the date by which dispositive
motions, including our summary judgment motion, had to be heard
to November 1st. Because the contingencies in the settlement
agreement relating to the development agreement had not yet been
reached by the end of that scheduling order, we again had to ask
the Court to extend that order. That, again, was done by a
motion to the Court based upon the stipulation of counsel.
Enclosed you will find the latest order extending discovery to
February 1st, and the hearing on dispositive motions to March
1st. The Court has granted these extensions based on the
representations of counsel that the case is essentially settled,
but that there are certain contingencies that are not totally
under the control of the parties to this lawsuit, and that the
case cannot be dismissed until those contingencies are met.
An Equal Opportunity Employer
7.3
Barb Dacy
October 29, 1993
Page 2
We still have a pending motion for summary judgment. It was
scheduled for a second time to be heard today, October 29th, but
because of the extension of the scheduling order, it was stricken
from the calendar. If the settlement is not concluded by the 1st
of February, then that motion must again be reinstated to be
heard before March 1, 1994. Likewise, any discovery which yet
needs to be done (Martinson does have his outstanding request the
deposition of you and Bill Burns) will have to be completed by
February 1st. Hopefully, the matter will be brought to a
conclusion before those actions need to'be taken. I am not sure
what kind of reception we would get by the Court if we ask, for
the third time, for an extension of the scheduling order.
If you have any questions, Barb, please give me a call.
Y
STEFFEN, LTD.
1 A. Jensen
:tpf
Enclosure
STATE'OF MINNESOTA
COUNTY OF ANOKA
?.4
CONDEMNATION
DISTRICT COURT
TENTH JUDICIAL DISTRICT
Court File No. C7 -91 -4439
The Housing and Redevelopment
Authority of the City of Fridley,
Minnesota, a public body FILED
corporate and politic under the
laws of the State of Minnesota,
Petitioner, . OCT L 8 1993 ORDER
vs . JANE F. MORROW
COURT .t!N,G ?3TPATOR
Ernest L. Fitch, Muriel K. Fitch, ANOKA wUNTY• MN
Donald A. Fitch, and Judith A. CHAN1'FL I PL's► rRS
Fitch, OEPUTY
Respondents.
Upon the joint request of Counsel for all the parties, the
Scheduling Order issued on November 25, 1992 and amended on July
15, 1993 is hereby Ordered to conform with the following:
1. The parties shall complete discovery by February 1, 1994.
2. Dispositive motions shall be heard by March 1, 1994.
3. A Joint Statement of the Case will be filed by April 1,
1994.
Dated: 1h L 7, ti � �
BY THE COURT
17 = OF DISTRICT COURT
8.1
Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 10, 1993
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Westminster Project Update
Jim Casserly is still in the process of developing a development
contract as directed by the HRA regarding the Westminster Norwood
square senior housing project. We hope to have a development
contract and resolution for approval by the HRA at its December
meeting.
BD:ls
M -93 -659
a° 0
9.1
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: November 10, 1993
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: 1994 Meeting Dates
The HRA should note and confirm the availability for the 1994 HRA
meeting dates. Changes are proposed to the first half of the year
since the Executive Director is committed to attend the Association
of Metropolitan Municipalities' Board meeting on the second
Thursday of each month. Therefore, it is proposed that the HRA
meet on the first Thursday of the month beginning in January 1994
and ending in May 1994. Also, note that the December 1993 meeting
is scheduled for the third Thursday in order to provide adequate
time to prepare items which need to be concluded in 1993. The
meeting dates are as follows:
December 16, 1993 (third Thursday)
January 6, 1994 (first Thursday)
February 3, 1994 (first Thursday)
March 3, 1994 (first Thursday)
April 7, 1994 (first Thursday)
May 5, 1994 (first Thursday)
June 9, 1994 (second Thursday)
July 14, 1994 (-second Thursday)
August it (second Thursday)
September 8, 1991 (second Thursday)
October 13, 199( (second Thursday)
November 10, 199Y (second Thursday)
December 8 (second Thursday)
c
Please let us know as far in advance as possible as whether or not
you can attend these meetings.
BD:ls
M -93 -660
I
i
10.1
Community Development Department
HOUSING AND REDEVELoPMENT AUTHORITY
DATE: November 10, 1993
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Hedman Acquisition Update
David Hedman has agreed on an acquisition price of $68,000 (the
purchase agreement and correspondence are, attached). The 1993
assessed valuation of the property is $66,200.
I will be inspecting the home with ACCAP on Monday, November 15,
1993, to determine their interest in moving the home to another
location in Anoka County. ACCAP indicated on a preliminary basis
that they may not be able to move the house this fall because of
the inability to find a lot and dig a foundation prior to the
winter freeze. In the meantime, ACCAP has inquired as to whether
or not the HRA would be willing to allow them to lease the house
to a transitional family and possibly move the family with the
house in the spring.
We will provide the HRA with more details about ACCAP's proposal
after our meeting on Monday, November 15, 1993.
Sadie Gunderson has agreed to extend the option agreement for an
additional year. An executed copy of the purchase agreement is
also attached. We hope to close on the Hedman property within the
next 3 -4 weeks. Another update will be provided at the December
meeting.
BD:ls
M -93 -662
�o
` 4.4- �M ^\
i ~ ft�wY
k.
10.2
AMENDMENT TO PURCHASE AGREEMENT 1 o.3
THIS AMENDMENT TO PURCHASE AGREEMENT, by and between the
Housing and Redevelopment Authority in and for the City of
Fridley (Buyer ") as assignee and successor in interest to
FAIRFIELD PROPERTIES, INC., a Minnesota corporation armed SADIE H.
GUNDERSON ( "Seller "), made and entered into this day of
_Oelr %3 , 1993.
In consideration of the premises and of other good and
valuable consideration, Seller and Buyer hereby amend said
Purchase Agreement and agree as follows:
1. EXTENDED CLOSING DATE: The date of closing is hereby
extended from October 31, 1993 to no later than October
31, 1994 subject to all terms and conditions set forth
in the Purchase Agreement dated November 7, 1986
between Fairfield Properties, Inca and Sadie H.
Gunderson.
2. EARNEST MONEY: If the closing occurs on or before
October 31, 1994, then the $5,500 non - refundable
Earnest Money previously paid and the $500 of non-
refundable Earnest Money paid with this Amendment (a
total of $6,000) will be applied to the Purchase Price
in accordance with the terms of said Purchase Agreement
applicable to all payments of Earnest Money.
IN WITNESS WHEREOF, the parties have caused these presents
to be executed as of the day and year first above written.
SADIE H. GUNDERSON (SELLER)
��0' . 10
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA (BUYER)
By a __I , 9
Its Executive Director
10.4
G7YOF
FRIDLEY
FRIDLEY MUNICIPAL CENTER • 6431 UNIVERSITY "E. N.E. FRIDLEY. MN 55432 . (612) 571 -3450 • FAX (612) 571 -1287
October 29, 1993
David G. Hedman
5695 West Moore Lake Drive
Fridley, MN 55432
Dear Mr. Hedman:
This is to confirm that we agreed to a purchase price of $68,000
in a telephone conversation on Monday, October 18, 1993. Since
that time, I have been working with our attorney, Jim Casserly, for
your property regarding the procedures for closing. The following
must be completed:
1. Enclosed is the amended purchase agreement stating that
the purchase price is $74,000. The $6,000 previously
paid to you equals our agreed -upon price of $68,000.
2. The seller is responsible for extending the abstract of
title pertaining to the property. You should contact the
Old Republic Title Company at 371 -1111 to extend the
abstract. This company was involved with other closings
on the Lake Pointe property so they would be the most
appropriate choice to update your abstract. You would
be responsible for this cost.
3. Also ask the Title Company to prepare a title.insurance
policy. The HRA would pay for the title insurance
policy.
4. Ask the Title Company to prepare the warranty deed, an
affidavit, and any other necessary closing papers.
Again, this is typically the seller's expense.
5. Try to find out when the Title Company would complete its
work. Based on its completion date, we can then
establish the appropriate closing date. In the meantime,
I will notify the HRA of the results of our negotiation.
Maybe we can look to a closing date on December 1, 1993.
10.5
David G. Hedman
October 29, 1993
Page 2
6. All property taxes would be pro -rated to the date of
closing. At this point in time, there are no special
assessments pending against the property.
Should you have any questions, please feel free to contact me.
Sincerely,
Barbara Dacy
Community Development Director
BD:ls
cc: William Burns, City Manager
Jim Casserly
Casserly Molzahn & Associates
215 South 11th Street,'Suite 300
Minneapolis, MN 55402
4'- - .
ros.
AMENDMENT TO PURCHASE AGREEMENT
THIS AMENDMENT TO PURCHASE AGREEMENT, by and between the
Housing and Redevelopment Authority in and for the City of
Fridley (Buyer ") as assignee and successor in interest to
FAIRFIELD PROPERTIES, INC., a Minnesota corporation and DAVID G.
HEDMAN ( "Seller "), made and entered into this day of
, 1993.
In consideration of the premises and of other good and
valuable consideration, Seller and. Buyer hereby amend said
Purchase Agreement and agree as follows:
1. PURCHASE PRICE: The Purchase Price in said Purchase
Agreement is hereby reduced to $74,000.
2. EXTENDED CLOSING DATE: The date of closing is hereby
extended from October 31, 1993 to no later than
December 15, 1993 subject to all terms and conditions
set forth in the Purchase Agreement.
3. EARNEST MONEY: If the closing occurs on or before
December 15, 1993, then the $6,000 Earnest Money
previously paid will be applied to the Purchase Price
in accordance with the terms of said Purchase Agreement
applicable to all payments of Earnest Money.
IN WITNESS WHEREOF, the parties have caused these presents
to be executed as of the day and year first above written.
DAVID G. HEDMAN (SELLER)
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA (BUYER)
By
Community Development Department
HOUSING AND REDEVELOPMENT AuTmRITY
November 10, 1993
City of Fridley
TO: William Burns, Executive Director of BRA
FRaK: Barbara Dacy, Clommmity Development Director
SUBJWT: Loan Request by Parson's Electric C cupany
Parson's Electric purchased the former Simer Pump building at 5780 Main Street
in September 1993. Since that time, they have been remodeling and rehabilitating
the building. Parson's Electric is an electrical contractingcxanpany and employs
up to 400 field electricians. Major projects that they have worked on include
the State Theatre, Mall of America, the De LaSalle Plaza building, and tenant
spaces in the Norwest Tower.
Parson's Electric purchased the building cn a contract- for -deed for apprmc mately
$850,000. About $ 150,000 was paid by the new owner in cash and the remaining
$650,000 is secured by a note requiring annual payments (there is no balloon
payment) . Parson's Electric anticipates a cost of $1,000,000 to rehabilitate
the building. They believe the project cost ranges frown $1,800,000 to
$2,000,000.
Parson's Electric has requested a $500,000 loan for a five to six year term at
a 5% .interest rate. Zhe parcel is not located in a redevelopment project area
or a tax increment district. Creating a tax increment district is not possible
since the improvements have. started. Creating a project area -is possible;
hcwevgr, it does raise concerns about the applicability of the "But For" test
when using tax increment monies to provide a loan payment.
Further, assuming that the project cost is $1,800,000, the current EPA policy
is to provide no more than 5 -151t in assistance via a loan. This equates to a
loan ranging from $100,000 to $300,000.
Reca mtendation
Staff is concerned about pursuing the creation of a project area and a loan to
Parson's Electric. Zhe HRA could be subject to criticism for using tax increment
fluids for a project whose improvements are already occurring. Should the HRA
want to establish a program which assists businesses in these types of
situations, separate policies and procedures should be, established to clearly
differentiate between the two programs. Further, the amount of the loan is such
that it is beyond past guidelines for assistance projects.
BD:ls
M- 93-666
e PARSONS
ELECTRIC CO.
917 FIFTH AVENUES., MPLS., MN 55404
November 9, 1993
City of Fridley
6431 University Avenue NE
Minneapolis, MN 55432
Attention: Barb Dacy
Re: Economic Development Loan
Dear Barb:
,ter°
11.2
FAX (612) 339 -8843 612/339 -8761
I have enclosed some additional information about Parsons Electric Co. that you may find
helpful.
In general, I have outlined the terms of the loan we hope to obtain along with some other
information.
Loan Amount: $500,000
Term: 5 to 6 years
Rate: 5%.
Repayment Schedule: Principal & Interest repaid monthly.
Amortization Period: Consistent with Loan Term
Security: Second Mortgage & Personal Guarantee
Occupancy: November 29, 1993
Employees: 300
Barb, if you think it would be helpful for me to be present at your intial council meeting, please
call me and I will make myself available.
Sincere y�
Tim thy F. Floeder
Secretary/Treasurer
PARSONS 1 1 3
ELECTRIC CO.
COMPANY HISTORY
Parsons Electric Co. was founded in 1927, incorporated in 1946 and moved to
its present address in 1947.
Parsons Electric Co. is one of the largest electrical contracting companies in the
area employing up to 400 field electricians and has been involved in building
and maintaining many of the major facilities in the state.
Parsons Electric Co. is organized into four operating divisions with the division
managers reporting to the company president. The contract and special projects
divisions are the largest of the four divisions.
Parsons is a closely held corporation; Donald Dolan is the Company President
and sole stockholder. Don Michel is a Vice President and manages the Special
Projects Division. Mike Oelrich is Vice President of the Contract Division. Tim
Floeder is Secretary/Treasurer. Our Technical Services and Equipment Sales
divisions are managed by Jim Moryn.
Our Company's organization enables us to provide our customers excellent
service for all their electrical needs.
11.4
REFERENCES
BANK:
NORWEST BANK MINNESOTA, N.A.
Norwest Center
Sixth and Marquette
Minneapolis, MN 55470
Commercial Account Officer: Dennis Johnson
Vice President
(612) 667 -7178
BONDING COMPANY:
CNA INSURANCE COMPANIES
700 Piper Jaffray Tower
P.O. Box 9322
Minneapolis, MN 55440
Bond Manager: Timothy P. Killeen
(612) 336 -2525
BONDING / INSURANCE AGENT:
OSBORNE INSURANCE AGENCY
1935 West Burnsville Parkway
Burnsville, MN 55337
Account Executive:- Mark Kampf
(612) 890 -0414
SUPPLIERS:
BARBER ELECTRIC SUPPLY, INC.
470 Kittson Street
St. Paul, MN 55101
(612) 224 -5781
GRAYBAR ELECTRIC COMPANY
2300 East 25th Street
Minneapolis, MN 55406
(612) 721 -3545
NORTHLAND ELECTRIC COMPANY
521 South Tenth Street
Minneapolis, MN 55404
(612) 341 -6100
DUN & BRADSTREET:
#00- 780 -6367
Rating 3A2
a5A -
Draft: October 11, 1993
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY, MINNESOTA
And
VICTOR ROSENBLUM
This document was drafted by:
Casserly Law Office, P.A.
215 South 11th Street
Minneapolis, Minnesota 55403
TABLE OF CONTENTS
ARTICLE I
Definitions
Section 1.1 Definitions
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority
Section 2.2 Representations and Warranties by the
Redeveloper
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Loan to Redeveloper for Site Improvements
Section 3.2 Limitations on Undertaking of the City
Section 3.3 Conditions Precedent to Authority Loan
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements
Section 4.2 Completion of Construction
Section 4.3 Certificate of Completion
ARTICLE V
Events of Default
Page
3
N.
11
10
10
10
Section
5.1
Events of Default^Defined
12
Section
5.2
Remedies on Default
13
Section
5.3
No Remedy Exclusive
13
Section
5.4
No Implied Waiver
13
Section
5.5
Agreement to Pay Attorney's Fees and Expenses
13
ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment 14
Section 6.2 Prohibition Against Transfer of Property
and Assignment of Agreement 14
ARTICLE VII
Additional Provisions
Section
7.1
Conflict of Interests
15
Section
7.2
Restrictions on Use
15
Section
7.3
Titles of Articles and Sections
15
Section
7.4
Notices and Demands
15
Section
7.5
Indemnification of Authority
16
Section
7.6
Counterparts
16
Section
7.7
Law Governing
16
Section
7.8
Expiration
16
Section
7.9
Provisions Surviving Rescission
or Expiration
16
ARTICLE VIII
Mortgage Financin
Section
8.1
Limitation Upon Encumbrance of Property
17
Section
8.2
Approval of Mortgage
17
Section
8.3
Notice of Default; Copy to Mortgagee
18
Section
8.4
Mortgagee's Option to Cure Defaults
18
Section
8.5
Authority's Option to Cure Default on
29
SCHEDULE
F
Mortgage
18
Section
8.6
Subordination and Modification for the
Benefit of Mortgagees
19
SIGNATURES 20
SCHEDULE
A
Description of Redevelopment Property
22
SCHEDULE
B
Site Improvements
23
SCHEDULE
C
Certificate of Completion
24
SCHEDULE
D
Note
26
SCHEDULE
E
Authority Mortgage
29
SCHEDULE
F
Permitted Encumbrances
33
CONTRACT FOR PRIVATE REDEVELOPMENT
3 THIS AGREEMENT, made on
199'by and between the Hous:
an for the City of Fridley,
political subdivision of the
the Constitution and laws of
Rosenblum (the "Redeveloper"
WITNESSETH:
or as of the 1st day of September,
ing and Redevelopment Authority in
Minnesota (the "Authority "), a
State of Minnesota organized under
the State of Minnesota and Victor
) ,
WHEREAS, the Board of Commissioners (the "Board ") of the
Authority has determined that there is a need for development and
redevelopment within the corporate limits of the City to provide
employment opportunities, to provide adequate housing in the
City, including low and moderate income housing and housing for
the elderly, to improve the tax base and to improve the general
economy of the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority
has established, pursuant to Minnesota Statutes, Sections 469.001
et sear. (the "Act "), the development program known as the
Modified Redevelopment Plan for its Redevelopment Project No. 1
(which program, as amended, and as it may be amended, is
hereinafter referred to as the "Redevelopment Program ") in the
City to encourage and provide maximum opportunity for private
development and redevelopment of certain property in the City
which.is not.now in its highest and best use;
WHEREAS, major objectives in establishing the Redevelopment
Program are to:
1. Promote and secure the prompt redevelopment of certain
property in the Redevelopment Program, which property is not now
in its highest and best use in a manner consistent with the
City's Comprehensive Plan and with a minimum adverse impact on
the environment, and thereby promote and secure the redevelopment
of other land in the City.
2. Provide additional employment opportunities within the
Redevelopment Program and the City for residents of the City and
the surrounding area, thereby improving living standards,
reducing unemployment and the loss of skilled and unskilled labor
and other human resources in the City.
3. Prevent the deterioration and secure the increase of
commercial /industrial property subject to taxation by the City,
the Independent School Districts, Anoka County, and the other
taxing jurisdictions in order to better enable such entities to
pay for governmental services and programs required to be
provided by them.
4. Provide for the financing and construction for public
improvements in and adjacent to the Redevelopment Program
necessary for the orderly and beneficial redevelopment of the
Redevelopment Program and adjacent areas of the City.
5. Promote the concentration of new desirable industrial,
office, and other appropriate redevelopment in the Redevelopment
Program so as to maintain the area in a manner compatible with
its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and
redevelopment, whenever possible.
7. Create a desirable and unique character within the
Redevelopment Program through quality land use alternatives and
design quality in new or remodeled buildings.
8. Encourage and provide maximum opportunity for private
redevelopment of existing areas and structures which are
compatible with the Redevelopment Program; and
WHEREAS, in order to achieve the objectives of the Authority
and City in creating the Redevelopment Program the Authority is
prepared to acquire that certain real property located in the
Redevelopment Program (such real property is more particularly
described in Schedule A to this Agreement) and to convey said
real property to the Redeveloper for development and
redevelopment in accordance with this Agreement; and
WHEREAS, the Authority believes that the development and
redevelopment of the Redevelopment Property pursuant to this
Agreement, and fulfillment generally of the terms of this
Agreement, are in the vital and best interests of the Authority
and the health, safety, morals and welfare of its residents, and
in accord with the public purposes and provisions of applicable
federal, state and local laws under which the development and
redevelopment are being undertaken and assisted;
NOW, THEREFORE, in consideration of the premises and the
mutual obligations of the parties hereto, each of them does
hereby covenant and agree with the other as follows:
E
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a
different meaning clearly appears from the context:
"Act" means Minnesota Statutes, Section 469.001 et sue.
"Agreement" means this Agreement, as the same may be from
time to time modified, amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota.
"Authority Mortgage" means a mortgage which is secured by
the Redevelopment Property, the form of which is attached hereto
as Schedule E and may be subordinate to the Mortgage.
"Certificate of Completion" means the certification, in the
form of the certificate contained in Schedule C attached to and
made a part of this Agreement, provided to the Redeveloper,
pursuant to Section 4.4 of this Agreement.
"City" means the City of Fridley, Minnesota.
"Construction Plans" means the plans, specifications,
drawings and related documents on the construction work to be
performed by the Redeveloper on the Redevelopment Property which
(a) shall be as detailed as the plans, specifications, drawings
and related documents which are submitted to the building
inspector or the City, and (b) shall include at least the
following for each building: (1) site plan; (2) foundation plan;
(3) basement plans; (4) floor plan for each floor; (5) cross
sections of each (length and width); (6) elevations (all sides,
except as to a side of existing structure where no construction
is to take place); (7) facade and landscape plan; and (8) such
other plans of supplements to the foregoing plans as the City may
reasonably request.
"Council" means the Council of the City.
"County" means the County of Anoka, Minnesota.
. "Guarantee" means the guarantee of payment of the Note and
performance of this Agreement, which is attached hereto as
Schedule F.
"Holder" means the owner of a Mortgage.
3
"Minimum Improvements" means the construction of an office/
warehouse /manufacturing building of approximately 29,000 square
feet on the Redevelopment Property with total estimated project
costs of $2,250,000 and total estimated construction costs of
$1,000,000.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
"Minnesota Environmental
located at Minnesota Statutes,
amended.
Policy Act" means the statutes
Sections 116D.01 et sea., as
Rights Act" means the statutes
Sections 116B.01 et sea., as
"Mortgage" means any mortgage or security agreement in which
the Redeveloper has granted a security interest in the
Redevelopment Property, or any portion thereof, or any
improvements constructed thereon, and which is a permitted
encumbrance pursuant to the provisions of Article VIII.
"National Environmental Policy Act" means the federal law
located at 42 U.S.C. Sub. Sect. 4331 et sea., as amended.
"Note" means the note in the principal amount of One Hundred
Twenty Five Thousand and no /hundredths Dollars ($125,000) or the
cost of the Site Improvements, whichever is less, substantially
in the form of Schedule D attached to this Agreement, and to be
made by the Redeveloper payable to the order of the Authority in
accordance with the terms of this Agreement. If the Note
principal is less than $125,000, then the Payment Schedule
attached as Exhibit A to the Note shall be reduced
proportionately.
"Permitted Encumbrances" means the encumbrances described on
Schedule F to this Agreement.
"Project Area" means Redevelopment Project No. 1, as
amended, established in accordance with the Act.
"Redeveloper" means Victor Rosenblum.
"Redevelopment Program" means the modified redevelopment
program adopted by the Authority for its Redevelopment Project
No. 1, as amended.
"Redevelopment Project" means the Redevelopment Property and
the Minimum Improvements.
"Redevelopment Property" means the real property described
in Schedule A of this Agreement.
4
"Site Improvements" means those costs described on Schedule
B as qualified improvements of the Redevelopment Property.
"State" means the State of Minnesota.
"Unavoidable Delays" means delays which are the direct
result of strikes, delays which are the direct result of
unforeseeable and unavoidable casualties to the Minimum
Improvements, the Redevelopment Property or the equipment used to
construct the Minimum Improvements, delays which are the direct
result of governmental actions, delays which are the direct
result of judicial action commenced by third parties, citizen
opposition or action affecting this Agreement or adverse weather
conditions or acts of God.
5
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority. The Authority
makes the following representations as the basis for the
undertaking on its part herein contained:
(a) The Authority is a public'body duly organized and
existing under the laws of the State. Under the provisions of
the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The Authority has approved the Redevelopment Program in
accordance with the terms of the Act.
(c) To finance the costs of the activities to be undertaken
by the Redeveloper, the Authority proposes, in accordance with
the provisions of this Agreement, to loan to the Redeveloper the
Note principal for Site Improvements.
(d) The Authority will cooperate with the Redeveloper with
respect to any litigation commenced by third parties in
connection with this Agreement.
Section 2.2 Representations and Warranties by the
Redeveloper. The Redeveloper represents and warrants that:
(a) The Redeveloper will construct, operate and maintain
the Minimum Improvements in accordance with the terms of this
Agreement, the Redevelopment Plan and all local, state and
federal laws and regulations (including, but not limited to,
environmental, zoning, building code and public health laws and
regulations).
(b) The Minimum Improvements will be an allowed used under
the zoning ordinance of the City.
(c) As of the date of execution of this Agreement, the
Redeveloper has received no notice or communication from any
local, state or federal official that the activities of the
Redeveloper or the Authority in the Project Area may be or will
be in violation of any environmental law or regulation.
As of the date of execution of this Agreement, the Redeveloper is
aware of no facts, the existence of which would cause it to be in
violation of any local, state or federal environmental law,
regulation or review procedure or which would give any person a
valid claim under the Minnesota Environmental Rights Act.
6
(d) The Redeveloper will use its best efforts to obtain, in
a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all
applicable local, state and federal laws and regulations which
must be obtained or met before the Minimum Improvements may be
lawfully constructed.
(e) The Redeveloper agrees that it will cooperate with the
Authority and shall indemnify the Authority against all costs,
including the costs of defense incurred by the Authority through
an attorney of its choosing, with respect to any litigation
commenced by third parties in connection with this Agreement.
(f) The financing arrangements which the Redeveloper has
obtained or will obtain, to finance acquisition or construction
of the Minimum Improvements, together with financing provided by
the Authority pursuant to-this Agreement, will be sufficient to
enable the Redeveloper to successfully complete the Minimum
Improvements as contemplated in this Agreement.
(g) The construction of the Minimum Improvements, in the
opinion of the Redeveloper, would not reasonably be expected to
occur solely through private investment within the reasonably
foreseeable future without the use of tax increment financing
provided by the City pursuant to this Agreement.
(h) For the construction of the Minimum Improvements the
Redeveloper will pay wages in accordance with the prevailing wage
rate as that term is defined in Minnesota Statutes, Section
177.42, Subdivision 6 and in the City Resolution No. 25 - 1990.
The City's Public Works Department shall be responsible for
monitoring Redeveloper's compliance of this requirement.
7
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Loan to Redeveloper for Site Improvements. As
consideration for the execution of this Agreement and the
construction of the Minimum Improvements by the Redeveloper,
subject to the further provisions of this Agreement, the
Authority agrees to loan to the Redeveloper for Site Improvements
the Note principal as provided in Section 3.3 and Article VIII.
Section 3.2 Limitations on Undertaking of the City.
(1) The Authority shall have no obligation to the
Redeveloper under this Agreement to loan the Note principal to
the Redeveloper for the Site Improvements if the Authority, at
the time the loan is to be made is entitled under Section 5.2 to
exercise any of the remedies set forth therein as a result of an
Event of Default which has not been cured. If the Authority has
not exercised its remedies under Section 5.2(b) and if the loan
is withheld due to an Event of Default which is later cured, such
loan shall be made after such Event of Default has been cured.
(2) The Authority shall have no obligation to loan the Note
principal to the Redeveloper for the Site Improvements unless the
Redeveloper has submitted to the Authority the original purchase
agreement whereby it acquired the Redevelopment Property from
Trillium Corporation and, if necessary, invoices for the Site
Improvements along with a certification signed by the
Redeveloper's project architect to the effect that the costs for
which.payment was made have been incurred in connection with
construction documents previously reviewed by the Authority. The
Redeveloper shall also provide lien waivers from the contractors,
subcontractors and /or construction managers for the Site
Improvements. The Authority shall indicate its acceptance of the
amounts for the loan, assuming the conditions of this section
have been complied with and there is no Event of Default, when it
issues a Certificate of Completion in accordance with Section
4.3.
Section 3.3 Conditions Precedent to Authority Loan. The
Authority's obligation to loan the Note principal in accordance
with Section 3.1 shall be contingent upon the satisfaction by the
Redeveloper of the following conditions precedent:
(a) The Redeveloper shall be in material compliance with
all of the terms and provisions of this Agreement.
(b) The Redeveloper shall have received a Certificate of
Completion from the Authority, pursuant to Section 4.3 of this
Agreement.
91
(c) There shall have been obtained from the City all
special use permits and zoning approvals necessary for the
construction of the Minimum Improvements.
(d) That the Redeveloper shall be in compliance with all
ordinances of the City.
(e) The execution by the Redeveloper of the Note attached
as Schedule D.
(f) The execution by the Redeveloper of the Authority
Mortgage attached as Schedule E.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements. The
Redeveloper agrees that it will construct the Minimum
Improvements on the Redevelopment Property in accordance with the
Construction Plans approved by the City.
Section 4.2 Completion of Construction. Subject to
Unavoidable Delays, the Redeveloper shall achieve substantial
completion of the construction of the Minimum Improvements by
December 31, 1994. All work with respect to the Minimum
Improvements to be constructed or provided by the Redeveloper on
the Redevelopment Property shall be in conformity with the
Construction Plans.
The Redeveloper agrees for itself, its successors and
assigns, and every successor in interest to the Redevelopment
Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall diligently prosecute to completion
the development of the Redevelopment Property through the
construction of the Minimum Improvements thereon, and that such
construction shall in any event be completed within the period
specified in this Section 4.2 of this Agreement.
Section 4.3 Certificate of Completion.
(a) Promptly after substantial completion of the Minimum
Improvements in accordance with those provisions of the Agreement
relating to the obligations of the Redeveloper to construct the
Minimum Improvements (including the date for completion thereof),
the Authority will furnish the Redeveloper with an appropriate
instrument so certifying. Such certification by the Authority
shall be (and it shall be so provided in the certification
itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement with
respect to the obligations of the Redeveloper, and its successors
and assigns, to construct the Minimum Improvements and the date
for the completion thereof.
(b) If the Authority shall refuse or fail to provide any
certification in accordance with the provisions of this Section
4.3 of this Agreement, the Authority shall, within ten (10) days
after written request by the Redeveloper, provide the Redeveloper
with a written statement, indicating in adequate detail in what
respects the Redeveloper has failed to complete the Minimum
Improvements in accordance with the provisions of the Agreement,
or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the Authority, for the Redeveloper
to take or perform in order to obtain such certification.
10
(c) The construction of the Minimum Improvements shall be
deemed to be substantially completed when the Redeveloper has
received an occupancy permit from the City's building inspector,
which permit shall not be unreasonably withheld.
11
ARTICLE V
Events of Default
Section 5.1 Events of Default Defined. The following shall
be "Events of Default" under this Agreement and the term "Event
of Default" shall mean whenever it is used in this Agreement any
one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem
real property taxes assessed with respect to the Redevelopment
Property.
(b) Failure by the Redeveloper to complete the Minimum
Improvements pursuant to the terms, conditions and limitations of
this Agreement.
(c) The holder of any mortgage on the Redevelopment
Property or any improvements thereon, or any portion thereof,
commences foreclosure proceedings as a result of any default
under the applicable mortgage documents.
(d) Failure by the Redeveloper to substantially observe or
perform any other covenant, condition, obligation or agreement on
its part to be observed or performed under this Agreement.
(e) If the Redeveloper shall
(A) file any petition in bankruptcy or for any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under the United
States Bankruptcy Act of 1978, as amended or under any
similar federal or-state law; or
(B) make an assignment for the benefit of their
creditors; or
(C) admit in writing their inability to pay their
debts generally as they become due; or
(D) be adjudicated as bankrupt or insolvent; or if a
petition or answer proposing the adjudication of the
Redeveloper, as bankrupt or its reorganization under any
present or future federal bankruptcy act or any similar
federal or state law shall be filed in any court and such
petition or answer shall not be discharged or denied within
ninety (90) days after the filing thereof; or a receiver,
trustee or liquidator of the Redeveloper, or if the Minimum
Improvements, or part thereof, shall be appointed in any
proceeding brought against the Redeveloper, and shall not be
discharged within ninety (90) days after such appointment,
12
or if the Redeveloper shall consent to or acquiesce in such
appointment.
Section 5.2 Remedies on Default. Whenever any Event of
Default referred to in Section 5.1 occurs and is continuing, the
Authority, as specified below, may take any one or more of the
following actions after providing thirty (30) days' written
notice to the Redeveloper, but only if the Event of Default has
not been cured within said thirty (30) days.
(a) The Authority may suspend its performance under this
Agreement until it receives assurances from the Redeveloper,
deemed adequate by the Authority, that the Redeveloper will cure
its default and continue its performance under this Agreement.
(b) The Authority may cancel and rescind the Agreement.
(c) Withhold the Certificate of Completion.
Section 5.3 No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Authority is intended to be exclusive of
any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission
to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
Section 5.4 No Implied Waiver. In the event any agreement
contained in this Agreement should be breached by any party and
thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent
breach hereunder.
Section 5.5 Agreement to Pay Attornev's Fees and Expenses.
Whenever any Event of Default occurs and the Authority shall
employ attorneys or incur other expenses for the collection of
payments due or to become due or for the enforcement or
performance or observance of any obligation or agreement on the
part of the Redeveloper herein contained, the Redeveloper agrees
that it shall, on demand therefor, pay to the Authority the
reasonable fees of such attorneys and such other expenses so
incurred by the Authority.
13
ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment. The
Redeveloper represents and agrees that its purchase of the
Redevelopment Property, and its other undertakings pursuant to
this Agreement, are, and will be used, for the purpose of
redevelopment of the Redevelopment Property and not for
speculation in land holding. The Redeveloper further recognizes
that, in view of (a) the importance of the redevelopment of the
Redevelopment Property to the general welfare of the Authority,
and (b) the substantial financing that has been made available by
the Authority for the purpose of making such redevelopment
possible, the qualifications and identity of the Redeveloper are
of particular concern to the Authority. The Redeveloper further
recognizes that it is because of such qualifications and identity
that the Authority is entering into this Agreement with the
Redeveloper, and, in so doing, is further willing to accept and
rely on the obligations of the Redeveloper for the faithful
performance of all undertakings and covenants hereby by it to be
performed.
Section 6.2 Prohibition Against Transfer of Property and
Assignment of Agreement. Also, for the foregoing reasons the
Redeveloper represents and agrees that prior to the date of
expiration as provided in Article VII, except for the purpose of
obtaining financing necessary to enable the Redeveloper or any
successor in interest to the Redevelopment Property, or any part
thereof, to perform its obligations with respect to making the
Minimum Improvements under this Agreement, and any other purpose
authorized by this Agreement, the Redeveloper has not made or
created and will not make or create or suffer to be made or
created any total or partial sale, assignment, conveyance, or
lease, or any trust or power, or transfer in any other mode or
form of or with respect to this Agreement or the Redevelopment
Property or any part thereof or any interest therein, or any
contract or agreement to do any of the same, without the prior
written approval of the Authority which shall not be unreasonably
withheld unless the Redeveloper remains liable and bound by this
Redevelopment Agreement in which event the Authority's approval
is not required. Any such transfer shall be subject to the
provisions of this Agreement. Notwithstanding the foregoing, the
Redeveloper may transfer the Redevelopment Property to any
corporation controlling, controlled by, or under common control
with the Redeveloper or to any corporation or entity controlled
by the Redeveloper.
14
ARTICLE VII
Additional Provisions
Section 7.1 Conflict of Interests. No member, official, or
employee of the Authority shall have any personal interest,
direct or indirect, in the Agreement, nor shall any such member,
official or employee participate in any decision relating to the
Agreement which affects his personal interests or the interests
of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
Section 7.2 Restrictions on Use. The Redeveloper shall not
discriminate upon the basis of race, color, creed, sex or
national origin in the sale, lease, or rental or in the use or
occupancy of the Redevelopment Property or any improvements
erected or to be erected thereon, or any part thereof.
Section 7.3 Titles of Articles and Sections. Any titles of
the several parts, Articles and Sections of the Agreement are
inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise
expressly provided in this Agreement, a notice, demand, or other
communication under this Agreement by either party to the other
shall be sufficiently given or delivered if it is dispatched by
registered or certified mail, postage prepaid, return receipt
requested, transmitted by facsimile, delivered by a recognized
overnight courier or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or
delivered personally to'the mailing or delivery address the
Redeveloper will, from time to time, furnish to the Authority.
The Redeveloper's current address is as follows:
Victor Rosenblum
8 Orme Court
St. Paul, Minnesota 55126
(b) in the case of the Authority, is addressed to or
delivered personally to:
Housing and Redevelopment Authority
in and for the City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
Attention: Executive Director
15
Section 7.5 Indemnification of Authority.
(1) The Redeveloper releases from and covenants and agrees
that the Authority, the City and its governing body members,
officers, agents, including the independent contractors,
consultants and legal counsel, servants and employees thereof
(hereinafter, for purposes of this Section, collectively the
"Indemnified Parties ") shall not be liable for and agrees to
indemnify and hold harmless the Indemnified Parties against any
loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the
Minimum Improvements or the Redevelopment Property.
(2) Except for any willful misrepresentation or any willful
or wanton misconduct of the Indemnified Parties, the Redeveloper
agrees to protect and defend the Indemnified Parties, now and
forever, and further agrees to hold the aforesaid harmless from
any claim, demand, suit, action or other proceeding whatsoever by
any person or entity whatsoever arising or purportedly arising
from the actions or .inactions of the Redeveloper (or if other
persons acting on its behalf or under its direction or control)
under this Agreement, or the transactions contemplated hereby or
the acquisition, construction, installation, ownership, and
operation of the Minimum Improvements or the Redevelopment
Property; provided, that this indemnification shall not apply to
the warranties made or obligations undertaken by the Authority in
this Agreement.
(3) All covenants, stipulations, promises, agreements and
obligations of the Authority contained herein shall be deemed to
be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body
member, officer, agent, servant or employee of the Authority.
Section 7.6 Counterparts. This Agreement is executed in any
number of counterparts, each of which shall constitute one and
the same instrument.
Section 7.7 Law Governing. This Agreement will be governed
and construed in accordance with the laws of the State.
Section 7.8 Expiration. This Agreement shall expire when
the Note is paid in full.
Section 7.9 Provisions Surviving Rescission or Expiration.
Sections 5.5 and 7.5 shall survive any rescission, termination or
expiration of this Agreement with respect to or arising out of
any event, occurrence or circumstance existing prior to the date
thereof.
16
ARTICLE VIII
Mortgage Financing
Section 8.1 Limitation Upon Encumbrance of Property. Prior
to the completion of the Minimum Improvements, as certified by
the Authority, neither the Redeveloper nor any successor in
interest to the Redevelopment Property or any part thereof shall
engage in any financing or any other transaction creating any
mortgage or other encumbrance or lien upon the Redevelopment
Property, other than Permitted Encumbrances, whether by express
agreement or operation of law, or suffer any encumbrance or lien
to be made on or attach to the Redevelopment Property, other than
Permitted Encumbrances, except:
(a) For the purposes of obtaining funds only to the extent
necessary for financing of the Minimum Improvements including,
but not limited to, labor and materials, equipment, professional
fees, real estate taxes, construction interest, organizational
and other indirect costs of development, costs of constructing
the Minimum Improvements, an allowance for contingencies,
acquisition cost of the Redevelopment Property, costs of
originating the Mortgage .and customary financing costs.
(b) Only upon the prior written approval of the Authority
in accordance with Sections 8.1 and 8.2.
The Authority shall not approve any Mortgage which does not
contain terms that conform to the terms of Section 8.5, except as
provided in Section 8.6 of this Agreement.
Section 8.2 Approval of Mortgage. The Authority shall
approve a Mortgage if: -
(a) The Authority first receives a copy of all mortgage
documents.
(b) The Mortgage loan, together with other funds available
to the Redeveloper, will, in the reasonable judgment of the
Authority, be sufficient to construct the Minimum Improvements;
however, the Mortgage and Authority Mortgage shall not secure an
amount greater than 90% of the casts described in Section 8.1(a).
(c) The Authority is not entitled under Section 5.2 to
exercise any of the remedies set forth therein as a result of an
Event of Default.
(d) The Authority determines that the terms of the Mortgage
conform to the terms of Section 8.5.
17
However, the approval of a Mortgage by the Authority shall not be
unreasonably withheld. Any Mortgage which is subordinated to the
rights of the Authority under this Agreement may be granted in
all or any part of the Redevelopment Property without the
approval of the Authority.
Section 8.3 Notice of Default; Cony to Mortgagee. Whenever
the Authority shall deliver any notice or demand to the
Redeveloper with respect to any breach or default by the
Redeveloper in its obligations or covenants under this Agreement,
the Authority shall at the same time forward a copy of such
notice or demand to each Holder of any Mortgage authorized by
this Agreement at the last address of such Holder shown in the
records of the Authority.
Section 8.4 Mortgagee's Option to Cure Defaults. After any
breach or default referred to in Section 8.3, each such Holder
shall (insofar as the rights of the Authority are concerned) have
the right, at its option, to cure or remedy such breach or
default (or such breach or default to the extent that it relates
to the part of the Redevelopment Property covered by its
mortgage) and to add�the cost thereof to the Mortgage debt and
the lien of its Mortgage; provided, however, that if the breach
or default is with respect to construction of the Minimum
Improvements, nothing contained in this Section or any other
Section of this Agreement shall be deemed to require such Holder,
either before or after foreclosure or action in lieu thereof, to
undertake or continue the construction or completion of the
Minimum Improvements, provided that any such Holder shall not
devote the Redevelopment Property to a use inconsistent with the
Redevelopment Plan or this Agreement without the agreement of the
Authority.
Section 8.5 Authority's Option to Cure Default on Mortgage.
Any Mortgage, unless such requirement is waived by the Authority,
executed by the Redeveloper with respect to the Redevelopment
Property or any improvements thereon shall provide that, in the
event that the Redeveloper is in default under any Mortgage
authorized pursuant to this Article VIII, the Holder shall notify
the Authority in writing of:
(a) The fact of the default.
(b) The elements of the default.
(c) The actions required to cure the default.
If the default is an "Event of Default" under such Mortgage,
which shall entitle such Holder to foreclose upon the
Redevelopment Property, the Minimum Improvements or any portion
thereof, and any applicable grace periods have expired, the
Authority shall have, and each Mortgage executed by the
18
Redeveloper with respect to the Redevelopment Property or any
improvements thereon shall provide that the Authority shall have
such an opportunity to cure the "Event of Default" within such
reasonable time period as the Holder shall deem appropriate.
Section 8.6 Subordination and Modification for the Benefit
of Mortgagees.
(a) In addition to the subordination of the Authority
Mortgage, in order to facilitate the obtaining of financing for
the construction of the Minimum Improvements by the Redeveloper,
the Authority agrees to subordinate its rights under this
Agreement'to the Holder of a Mortgage for the purposes described
in Section 8.1(a) of this Agreement.
(b) In order to facilitate the obtaining of financing for
the construction of -Ahe Minimum Improvements, the Authority
agrees that it shall agree to any reasonable modification of this
Article VIII or waiver of its rights hereunder to accommodate the
interests of the Holder of a Mortgage, provided, however, that
the Authority determines, in its reasonable judgment, that any
such modification(s) will adequately protect the legitimate
interest and security of the Authority with respect to the
Redevelopment Property.
IN WITNESS WHEREOF, the Authority has caused this Agreement
to be duly executed in its name and behalf and the Redeveloper
has caused this Agreement to be duly executed as of the date
first above written.'
19
Dated:
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
On this day of , 199_ before me, a
notary public within and for Anoka County, personally appeared
and
to me
personally known who by me duly sworn, did say that they are the
Chairman and Executive Director of the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota, a political
subdivision of the State of Minnesota, and acknowledged the
foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page - Contract for Private Redevelopment
20
DATED:
VICTOR ROSENBLUM
By
Victor Rosenblum
STATE OF MINNESOTA )
)ss
COUNTY OF )
On this day of , 199_ before me, a
notary public within and for County, personally appeared
and acknowledged the foregoing instrument.
Notary Public
Redeveloper Signature Page - Contract for Private Redevelopment
21
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
Lot 1, Block 5; and Outlots P, Q and S, In Great Northern
Industrial Center, Fridley, Minnesota, In Anoka County, M.
22
SCHEDULE B
SITE IMPROVEMENTS
Acquisition of Redevelopment Property
Grading and site preparation
Development of Holding Pond
23
SCHEDULE C
CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for
the City of Fridley, Minnesota, a Minnesota municipal corporation
(the "Authority ") and Victor Rosenblum (the "Redeveloper ") have
entered into a Contract for Private Redevelopment (the
"Agreement ") dated as of , 199_, regarding certain
real property referred to in the Agreement as the "Redevelopment
Property" located in Redevelopment Project
No. 1 in the City; and
WHEREAS, the Agreement contains certain conditions and
provisions requiring the Redeveloper to construct improvements
upon the Redevelopment Property (hereinafter referred to and
referred to in the Agreement as the "Minimum Improvements "); and
WHEREAS, Section 4.3 of the Agreement requires the Authority
to provide an appropriate instrument promptly after the
substantial completion (as defined in the Agreement) of the
Minimum Improvements so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.3 of the
Agreement, this is to certify that the Redeveloper has
substantially completed the Minimum Improvements in accordance
with the conditions and provisions of the Agreement relating
solely to the obligations of the Redeveloper to construct the
Minimum Improvements (including the dates for beginning and
completion thereof), and this certification shall be a conclusive
determination of satisfaction and termination of the agreements
and covenants in the Agreement with respect to the obligations of
the Redeveloper, and its successors and assigns, to construct the
Minimum Improvements and the dates for the beginning and
completion thereof.
Dated: , 19
24
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
On this day of , 199 before me, a
notary public within and for Anoka County, personally appeared
and
to me
personally known who by me duly sworn, did say that they are the
Chairman and Executive Director of the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota, a political
subdivision of the State of Minnesota, and acknowledged the
foregoing instrument on behalf of said Authority.
Notary Public
25
SCHEDULE D
NOTE
US $125,000.00
Fridley, Minnesota
199
FOR VALUE RECEIVED, the undersigned (the "Borrower ")
promises to pay to the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota (the "Note Holder "), or order
the principal sum of One Hundred Twenty Five Thousand Dollars
($125,000.00) with interest from August 1, 1994 on the unpaid
principal balance until paid, at the rate of 5% percent per
annum, and with payments due on the 1st day of each February and
August in installments set forth on the payment schedule attached
as Exhibit A. The entire unpaid principal balance together with
accrued interest shall be due in full on August 1, 2002.
Payments shall first be applied to interest with any excess
applied to principal. A late payment penalty of five
percent (5%) shall be charged on any payments not received
at the mailing address designated by the Note Holder by 5:00
P.M. on the 15th day following the date on which the payment
is due; interest will be calculated based on a 360 day year
and charged on a per diem basis in each month.
Principal and interest shall be payable at the Fridley Housing
and Redevelopment Authority, 6431 University Avenue N.E.,
Fridley, Minnesota, 55432 or such other place as the Note Holder
may designate.
If said installment under this Note is not paid when due and
remains unpaid after a date specified by a notice to Borrower,
which date shall not be less than thirty (30) days after the date
such notice is mailed, the Note Holder may exercise this option
to accelerate during default by Borrower regardless of any prior
forbearance. If suit is brought to collect this Note, the Note
Holder shall be entitled to collect all reasonable costs and
expenses of suit, including, but not limited to, reasonable
attorney's fees.
Borrower may prepay the principal amount outstanding in
whole or in part. Any partial prepayment shall be applied
against the principal amount outstanding.
26
Presentment, notice of dishonor, and protest are hereby
waived by all makers, sureties, guarantors and endorsers hereof.
This Note shall be the joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding
upon them and their successors and assigns.
Any notice to Borrower provided for in this Note shall be
given by mailing such notice by certified mail addressed to
Borrower at:
Victor Rosenblum
8 Orme Court
St. Paul, Minnesota 55126
or to such other address as Borrower may designate by notice to
the Note Holder. Any notice to the Note Holder shall be given by
mailing such notice by certified mail, return receipt requested,
to the Note Holder at the address stated in the first paragraph
of this Note, or at such other address as may have been
designated by notice to Borrower.
The indebtedness evidenced by this Note is secured by a
Mortgage, dated the day of , 199_, and reference is
made to the Mortgage for rights as to acceleration of the
indebtedness evidenced by this Note.
By
Victor Rosenblum
27
Exhibit A
Payment Schedule
February 1, 1997
August 1, 1997
February 1, 1998
August 1, 1998
February 1, 1999
August 1, 1999
February 1, 2000
August 1, 2000
February 1, 2001
August 1, 2001
February 1, 2002
August 1, 2002
OW
13,404
13,404
13,404
13,404
13,404
13,404
13,404
13,404
13,404
13,404
13,404
13,404
SCHEDULE E
AUTHORITY MORTGAGE
This Indenture, made this 1st day of , 199
between Victor Rosenblum and Marilyn L. Rosenblum, husband and `
wife (the "Mortgagor "), and the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota (the
"Mortgagee "):
WITNESSETH:
That Mortgagor, in consideration of the Mortgagee's
covenants and agreements made under that certain Contract for
Private Redevelopment by and between the Mortgagee and Victor
Rosenblum dated as of , 199_, (the "Agreement ") and in
order to secure the payment by the Mortgagor of all amounts
required to be paid under Section 3.3 of the Agreement and the
Note as provided in the Agreement, and further in consideration
of the sum of One Dollar ($1.00), to Mortgagor in hand paid by
Mortgagee, the receipt whereof is hereby- acknowledged, does
hereby convey unto Mortgagee, forever, real property in Anoka
County Minnesota, described as follows:
Lot 1, Block 5; and Outlots P, Q and S, In Great Northern
Industrial Center, Fridley, Minnesota, In Anoka County, MN.
together with all hereditaments and appurtenances belonging
thereto (the "Property ").
TO HAVE AND TO HOLD THE SAME, to Mortgagee forever.
Mortgagor covenants with Mortgagee as follows: That Mortgagor is
lawfully seized of the Property and has good right to convey the
same; that the Property is free from all encumbrances, except as
follows:
None
that Mortgagee shall quietly enjoy and possess the same; and that
Mortgagor will warrant and defend the title to the same against
all lawful claims not hereinbefore specifically excepted.
PROVIDED, NEVERTHELESS, that if Mortgagor shall pay
Mortgagee all amounts payable by the Mortgagor under the
Agreement and the Note in an amount not exceeding One Hundred
Twenty Five Thousand Dollars ($125,000.00), and shall repay to
Mortgagee, at the times and with interest as specified, all sums
advanced in protecting the lien of this Mortgage, in payment of
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taxes on the Property and assessments payable therewith,
insurance premiums covering buildings thereon, principal or
interest on any prior liens, expenses and attorney's fees herein
provided for and sum advanced for any other purpose authorized
herein, and shall keep and perform all the covenants and
agreements herein contained, then this Mortgage shall be null and
void, and shall be released at Mortgagor's expense.
AND MORTGAGOR covenants with Mortgagee as follows:
1. To pay the amounts as specified in the Agreement and
the Note.
2. To pay all taxes and assessments now due or that may
hereafter become liens against the Property before penalty
attaches thereto;
3. To keep all buildings, improvements and fixtures now or
later located on or a part of the Property insured against loss
by fire, extended coverage perils, vandalism, malicious mischief
and, if applicable, steam boiler explosion, for at least the
amount of the Mortgage at all times while any amount remains
unpaid under this Mortgage. If any of the buildings,
improvements or fixtures are located in a federally designated
flood prone area, and if flood insurance is available for that
area, Mortgagor shall procure and maintain flood insurance in
amounts reasonably satisfactory to Mortgagee. Each insurance
policy shall contain a loss payable clause in favor of Mortgagee
affording all rights and privileges customarily provided under
the so- called standard mortgage clause. The insurance shall be
issued by an insurance company or companies licensed to do
business in the State of Minnesota and acceptable to the
Mortgagee. the insurance policies shall provide for not less
than ten (10) days written notice to Mortgagee before
cancellation, non - renewal, termination, or change in coverage,
and Mortgagor shall deliver to Mortgagee a duplicate original or
certificate of such insurance policies.
4. To pay, when due, both principal and interest of all
liens or encumbrances.
S. To commit or permit no waste on the Property and to
keep it in good repair.
6. To complete forthwith any improvements which may
hereafter be under course of construction on the Property; and
7. To pay any other expenses and attorney's fees incurred
by Mortgagee by reason of litigation with any third party for the
protection of the lien of this Mortgage.
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8. To immediately pay the Note balance if the Property is
sold or transferred except that the Property may be transferred
to any corporation or partnership controlling, controlled by or
under common control of the Mortgagor; or the property may be
transferred to the heirs of Victor Rosenblum or his trustees in
the event of his death.
In case of failure to pay said taxes and assessments, prior
liens or encumbrances, expenses and attorney's fees as above
specified, or to insure said buildings, improvements, and
fixtures and deliver the policies as aforesaid, Mortgagee may pay
such taxes, assessments, prior liens,. expenses and attorney's
fees and interest thereon, or obtain such insurance, and the sums
so paid shall bear interest from the date of such payment at the
same rate of 5% per annum, and shall be impressed as an
additional lien upon the Property and be immediately due and
payable from Mortgagor to Mortgagee and this Mortgage shall from
date thereof secure the repayment of such advances with interest.
In case of default in any of the foregoing covenants,
Mortgagor confers upon the Mortgagee the option of declaring the
unpaid balance of the Note and the interest accrued thereon,
together will all sums advanced hereunder, immediately due and
payable without notice, and hereby authorizes and empowers
Mortgagee to foreclose this Mortgage by judicial proceedings or
to sell the Property at public auction and convey the same to the
purchaser in fee simple in accordance with the statute, and out
of the moneys arising from such sale to retain all sums secured
hereby, with interest and all legal costs and charges of such
foreclosure and the maximum attorney's fees permitted by law,
which costs, charges and fees Mortgagor agrees to pay.
The terms of this Mortgage shall run with the Property and
bind the parties hereto "and their successors in interest.
IN TESTIMONY WHEREOF, Mortgagor has hereunto set its hand
the day and year first above written.
By
Victor Rosenblum
By
Marilyn L. Rosenblum
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STATE OF MINNESOTA )
)ss
COUNTY OF
On this day of , 199_ before me, a
notary public within and for County, personally appeared
Victor Rosenblum and Marilyn L. Rosenblum and acknowledged the
foregoing instrument.
This document was drafted by:
Casserly Law Office, P.A.
215 South 11th Street
Minneapolis, Minnesota 55403
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Notary Public
A
e
SCHEDULE F
PERMITTED ENCUMBRANCES
The following shall be permitted encumbrances on the title
to the Redevelopment Property:
(a) Such encumbrances as are mutually agreed to in writing
by the Authority and the Redeveloper.
(b) Governmental regulations, if any affecting the use and
occupance of the Redevelopment Property and Minimum Improvements.
(c)
Zoning laws
of the City, County an
State.
(d)
All rights
in public highways upon
the land.
(e) Reservations to the State, in trust for the tax
districts concerned, of minerals and mineral rights in those
portions of the Redevelopment Property the title to which may
have at any time heretofore been forfeited to the State for
nonpayment of real estate taxes.
(f) The lien of unpaid special assessments, if any, not
presently payable but to be paid as a part of the annual taxes to
become due.
(g) The lien of unpaid real estate taxes, if any, not
presently payable but to be paid as a part of the annual taxes to
become due.
(h) A Mortgage as• permitted under Section 8.2.
(i) Any Mortgage subordinate to the Authority Mortgage as
permitted under Section 8.2.
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